Turbulent times--Global and China economic outlook
——Zhu Bin, Chief Economist and Managing Director of Nanhua Futures, President of Nanhua Research Institute
The report is divided into three sections.
The first part focused on the international situation. Mr. Zhu noted that the global landscape is undergoing profound restructuring. A unipolar world is transitioning to a multipolar one, neoliberalism is shifting toward neonationalism, and hyper-globalization is evolving into managed partial globalization. The core divergence in the Sino-U.S. economic rivalry lies in the reversal of nominal growth rates and intensifying competition in technology. Notably, China's AI product Deepseek has topped download charts in 160 countries or regions, becoming the fastest-growing AI application globally.
In the second part, he mainly discussed the U.S. capital market. Mr. Zhu explored multiple dimensions including the job market, prices, interest rates, real estate, stock valuations, and technological trends. He also analyzed the current trajectory of the "Buffett Indicator".
The last part is about the Four Challenges cacing China's economy and the solutions:
1. Weak Consumption: Mr. Zhu emphasized the critical role of wealth effects in driving consumption.
2. Real Estate Downturn: Both property sales and prices have declined sharply. While recent policies are gradually stabilizing transactions and reducing supply, a key catalyst for recovery lies in alleviating real estate credit risks. The sector's slump also exacerbates local fiscal pressures, necessitating fiscal expansion as a solution.
3. Deflationary Pressures: Businesses inherently favor inflationary environments. Reigniting inflation requires boosting M1 growth. The proposed solution is a "three-pronged approach": central bank fiscalization, fiscal policy prioritization of social welfare, and asset price stabilization.
4. Geopolitical Risks Under a Potential Trump Administration: The fundamental countermeasure involves diversifying exports while implementing coordinated exchange rate hedging and fiscal hedging strategies.
